Vornado has sent the Skyline portfolio into special servicing. filed

We continue to explore separating Washington into its own freestanding business unit. There can be no assurance that any transaction will be completed. Our objective in pursuing a separation of Washington would be much the same as it was in our separation of Urban Edge Properties, namely to create a smaller, laser-focused business unit with its own dedicated management and its own report card (i.e. stock price).

in the REIT's earnings call

While it is true that Washington and New York are both office-centric, each is its own market and there really is little overlap or synergy between them. Furthermore, New York and Washington are in totally different lifecycle situations (growth vs recovery).

Our Washington business is bouncing along the bottom. Excluding Skyline and buildings coming out of service, we expect the core business' EBITDA to be flat to positive $4 million in 2016 versus 2015.

Skyline's Loan Moves into Special Servicing Other Reasons including the sale of 1750 Pennsylvania Ave., in Washington DC

Washington has been a victim of the US Government's Department of Defense Base Realignment and Closure Statute move-outs, limited government growth in the Capital District, and a generally all around soft real estate market. Confoundingly, Washington has the lowest unemployment rate in the nation, the most educated work force in the nation, coupled with the highest vacancy rate in the nation; something doesn't add up.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.